Municipal broadband bill creates ‘faux market’ not free market

Gov. Beverly Perdue should have vetoed a bill that eliminated financial advantages municipalities had in setting up broadband service, a Libertarian Party of North Carolina spokesman said Friday.

“The governor should have vetoed this blatant intrusion into the free market and city business,” said Matt Drew, state party chair. While Libertarians do not believe municipalities should be in the business of providing broadband service, he said this bill does not create a “level-playing field” for private competition as supporters claim.

“The playing field is already tilted heavily, in the other direction — in favor of big service providers such as Time Warner Cable,” Drew said. “Supporters of this bill want to create a ‘faux market’ rather than a free market.”

“In a faux market, laws and regulations are written by and lobbied for by large incumbent corporations, with the intent of suppressing competition and protecting their market position,” Drew explained. “This bill is intended to protect these large incumbent service providers from city-owned network competition, closing a previously unnoticed gap in their market position defenses.”

Drew said that the governor should also work to the repeal the reporting and franchising provisions in the current state code.  “This will kindle actual competition in this long-stagnant market, providing lower prices and better services for more North Carolinians,” he said.

The bill bars municipalities from borrowing money for capital costs without voter approval. They also can no longer offer offer Internet services at below cost or use funds from other city-sponsored utilities. Five cities that currently offer services, Davidson, Morganton, Mooresville, Salisbury and Wilson are except from most of the bill’s provisions. Other cities that can show poor high-speed Internet access rates also would be exempt

One comment

  1. I am confused at the stance people are taking on this bill.

    It prohibits municipalities from borrowing money through a loop hole. This prevents municipalities from incurring debt without voter approval. The broadband projects usually cost millions of dollars and (in the case of Davidson) possibly end up being a boondoggle because the municipality is unfamiliar with what they are purchasing.

    How is preventing municipalities from using their tax free status against the open market? I can understand that people are annoyed by the lack of competition, but giving governments an edge by not having to count taxation into their cost is not free markets.

    The regulation portion that is not included should be addressed, but this bill addresses and issue that I would assume any conservative or libertarian could get behind, getting government out of business.

Comments are closed.